Reserve Bank head: No need for inquiry here like in Aust

April 22, 2018

An Australian banking inquiry has heard shock revelations that financial providers across the Tasman have been lying to regulators.

The new head of the Reserve Bank does not think New Zealand's banks conduct themselves as badly as their Australian counterparts and he does not think institutions here need to be investigated.

Adrian Orr, who took up the role of Reserve Bank Governor last month, told Corin Dann on TVNZ 1's Q+A programme Australian banking was "not a happy situation".

In Australia, a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services is currently looking into whether firms have engaged in misconduct.

The hearings began last month and have resulted in startling admissions of bad behaviour by banks and other financial companies.

"The true problem and challenge that is going on in Australia is cultural. It's not whether the regulator was awake or asleep. It's cultural," Mr Orr said.

He said New Zealand's banks were "infinitely better than some of the activity you've seen in Australia" and he did not think such an inquiry here was needed.

"I don't see any lack of confidence in banks in New Zealand. They are highly capitalised. They are highly efficient," Mr Orr said.

Mr Orr gives his opinion on why he thinks New Zealand’s financial sector is in good shape.

When asked whether New Zealand needed a capital gains tax he said: "I think that we need to have a more efficient, level playing field around tax."

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